Ashanti Gold Belt
KUBI - New Mineral Resource Received December 2010
Table One: Identified Mineral Resource (2.0 g/t Au cut-off) November 2010 for the Kubi Gold Project
Table Two: Mineral Resource Estimates by Material Type (2.0 g/t Au cut-off) November 2010
Figure 1: View of the Kubi Main Zone block model beneath open pit - looking NNW
The full text of the SEMS technical report entitled "Kubi Gold Project - Independent Mineral Resource Estimation" is available on the SEDAR website (www.sedar.com) under the Company's profile.
Drilling Results in Discovery of Additional Gold Mineralization
Drill testing of the 513 Zone in mid December has resulted in the discovery of additional gold mineralization. Three exploration holes were drilled for a total of 333 metres.
Drill holes KV09-510 to 519 (previously announced) were drilled on targets generated by airborne and ground geophysical EM surveys. This resulted in discovery of significant gold mineralization in the "513 Zone", which is hosted in garnetized metagabbro (similar to the garnet zone of the Kubi Main deposit located 1.3 km to the north east). Following this discovery auger geochemical sampling along the EM anomaly trends defined a gold anomaly extending some 600 metres to the south. Drill hole KV10-521, reported below, returned significant gold grades to 3.68 g/t over an estimated true width of 5.14 metres in a similar garnetized metagabbro.
Table Three: Drill Hole Assay Results December 2010 Kubi Gold Project - 513 Zone
The 513 Zone is located on the altered eastern margin of the Ashanti shear which hosts the AngloGold Ashanti Obuasi mine (pre-mining 60 million ounce resource) located ~10 km to the north of the Kubi Gold project. These drill results, on the Ashanti shear structure, are considered to be very encouraging given that drilling by previous operators was primarily focused to the east on the sub-parallel Kubi shear zone that hosts the Kubi Main gold deposit, and as a result the Ashanti structure has only been superficially explored to date. Recent airborne geophysical surveys have clearly outlined the location and interpreted alteration associated with the Ashanti shear zone. Additional drilling to determine the economic significance of this discovery, and auger drilling to extend the prospective zone a further 4 km south to the Offin River where extensive alluvial gold dredging operations have operated in the past, will commence in the New Year.
Scientific and technical information relating to the Kubi gold project resource estimate has been reviewed and approved by Simon E. Meadows Smith, BSc Geology, Managing Director of SEMS Exploration Services Ltd., who is a "qualified person" within the meaning of NI 43-101. All other scientific and technical information, including the Kubi gold project exploration update, has been reviewed and approved by Douglas R. MacQuarrie, P.Geo. (B.C.), the President and CEO of the Company, who is a "qualified person" under NI 43-101.
Field work was supervised by Paul Abbott MSc., Consulting Geologist. HQ, and NQ core was logged, sawn and sampled on site, with half samples sent to SGS Laboratory in Tarkwa, and analyzed for gold by fire assay-AA on a 50 gram sample charge. Internal QC consisted of inserting both blanks and standards into the sample stream and multiple re-assays of selected anomalous samples. Where multiple assays were received for an interval, the final value reported was the average of all results for the interval. Results from the QC program suggest that the reported results are accurate.
Kubi Gold Project Purchased from Nevsun in October 2007
We own a 90% equity interest in Kubi, located just 15 km south of AngloGold's Obuasi mine, the largest underground mine in West Africa which has been in continuous production for 113 years. A prefeasibility/scoping study on Kubi suggested production of up to 65,000 ounces per year from a 500 - 750 tpd underground mine based on a 14-year mine life.
Local artisanal miners first developed Kubi in the 1920s with eight adits being driven. In 1988 BHP (now BHP Billiton), during a major reconnaissance soil survey along the western margin of the Ashanti gold belt, outlined strong gold anomalies near the old workings and completed a program of ground geophysics and drilling.
NS Ghana optioned the property from BHP in 1993. Subsequently, it completed extensive exploration at Kubi in the mid through late 1990's, and defined gold mineralization in a near vertical 1.0 to 15.0 metre thick gold, garnet, and sulfide rich horizon. Diamond core drilling in 217 holes totalling 70,000 metres has defined the mineralized zone over an 1,800 metre long by up to 700 metre deep block contained within a northeast trending shear zone at the contact between Birimian and Tarkwaiian metasediments.
In 1999, NS Ghana transferred the property to Ashanti, who in return for cash and royalty payments to NS Ghana, mined from two small pits 58,696 ounces of gold in 500,230 tonnes of oxide ore grading 3.65 g/t gold, with the recovered grade 28% higher than Ashanti's modelled grade. In 2006/2007 Ashanti backfilled the pits and completed the bulk of the reclamation, with the final phase pending PMI Gold's near term development plans. The western part of the property, comprising the Kubi Mining leases, has now been returned to NS Ghana.
A map showing the regional setting of Kubi is available at:
http://www.pmigoldcorp.com/i/maps/PMIdrillApr09.jpg, and a detail of the exploration target areas at:
http://www.pmigoldcorp.com/i/maps/PMIdrillApr09c.jpg, and a detail photo of drill core from KV09-501 at
Gyimigya & Dunkwa
In September 2008, the Company acquired two new concessions adjoining to the north and south of our current Kubi Mining Leases. The new prospecting license is in two parts, known as the Gyimigya and Dunkwa and cover 8.20 and 26.26 sq km respectively. Gyimigya adjoins immediately to the south of the AngloGold Ashanti Obuasi mine concession. The new property covers a part of the former 390 sq km Dunkwa Continental Mining Lease. Gold dredging activities were active from 1930 for nearly 70 years on the Ofin, and Ankobra Rivers (Asankrangwa gold belt) and the Oda and Jeni Rivers (Ashanti gold belt, southwest of Kubi). The dredging operation was based in Dunkwa, and during this period some 1.45 million ounces of gold were recovered, with dredge production peaking in the early 1960's at 69,000 ounces per year (Minerals Commission, 2002). Previous work on the PMI Gold 'Kubi' concessions, consisting of soil sampling, ground IP, magnetic and radiometric surveys, airborne magnetic and electromagnetic surveys, trenching, 27 exploration adits and shafts, and 499 RAB drill holes (14,296 m), 229 RC drill holes (19,274 m) and 230 DDH drill holes (70,634 m) has outlined two strong gold trends: the Kubi trend which hosts the Kubi gold deposit and which is currently being evaluated for underground production (see PMI Gold news release dated April 10, 2008); and the Ashanti trend which 20 km to the north of Kubi hosts the AngloGold Ashanti Obuasi gold mine (26 million ounces of gold produced to date with current reserves and resources of over 30 million ounces). Of particular interest to PMI Gold, are a series of airborne electromagnetic conductive targets that were outlined by the 1994 survey: which are in areas of elevated gold in soils; and occur on, near or between the defined Ashanti and Kubi trends. One of these targets coincides with the main Kubi gold resource, however there are some 20 km of defined conductors that have not yet been drill tested; and an additional 4 km of strike length of the Ashanti and Kubi trends that have not yet been surveyed. These targets will be the focus of further drilling once adequate financing is completed.
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